CALGARY, ALBERTA -- (Marketwired) -- 07/11/13 -- JMC Corporation Ltd HK. ("JMC") and Pepcap Ventures Inc. (TSX VENTURE: WAV.P) ("Pepcap" or the "Company"), a capital pool company, are pleased to announce that they have entered into a letter of intent dated July 9, 2013 (the "LOI") to complete an arm's length business transaction. The Transaction shall serve as the Company's Qualifying Transaction, as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange") and is subject to the approval of the Exchange.
Pepcap is expected to own directly or indirectly 51% of certain energy assets within Indonesia (the "Properties"). The sale price is expected to be approximately $4,170,000 payable in common shares of Pepcap at a deemed value of $0.10 per common share (the "Transaction").
Under the terms of the LOI, Pepcap will own a controlling interest in mining concessions in Sumatra, Indonesia consisting of two blocks, held by PT. Krida Darma Andika. The Properties consist of 3 coal concessions that are located in Napal Putih and Putri Hijau districts of North Bengkulu Regency of Bengkulu Province, Indonesia. The Viking coal project divides 3 coal concessions into 2 coal blocks:
-- Block I (1,907 Ha) consists of 2 IUPs for 650 Ha and 1,307 Ha, located in Napal Putih district.-- Block II (7,236 Ha) consist of 1 IUP, located in Putri Hijau district.
"We are very pleased with this transaction as it will allow Pepcap Ventures to pursue its planned growth strategy in the natural resources sector", stated Clark Swanson, Chairman of Pepcap Ventures, Inc. He continued, "We are also fortunate to have attracted a wonderful group of high calibre mining executives to help aid with this endeavor."
The Qualifying Transaction
Pepcap is incorporated under the provisions of the Business Corporations Act (Alberta) with its registered and head office in Calgary, Alberta. It is a capital pool company and intends for the Transaction to constitute its "Qualifying Transaction" as such term is defined in the policies of the Exchange.
Concurrently with execution of a call option agreement held by JMC, a company incorporated under the laws of Hong Kong, JMC will facilitate transfer of 51% of the total issued and outstanding shares of Asia Mining Management, B.V., a Netherlands limited liability corporation, to Pepcap. Asia Mining Management (herein, "AMM") is the owner of PT. Krida Darma Andika, a company recognized as a PMA (Penanaman Modal Asing), a limited liability company, legally approved for foreign direct investment by the Indonesian Investment Coordinating Board.
The LOI is to be superseded by a definitive agreement in principle (the "Definitive Agreement"). The Transaction is subject to requisite regulatory approval, including the approval of the Exchange, and standard closing conditions, including the approval of the directors of each of JMC and Pepcap of the Definitive Agreement and completion of due diligence investigations to the satisfaction of each of JMC and Pepcap, as well as the conditions described below.
Since the Transaction is not a non-arm's length transaction, Pepcap is not required by the Exchange to obtain shareholder approval for the Transaction. Trading in the common shares of Pepcap has been halted. It is unlikely that the common shares of Pepcap will resume trading until the Transaction is completed and approved by the Exchange.